Wellesley Institute backgrounder: A first look at the 2007 federal budget
The 2007 federal budget entirely ignores Canada’s nation-wide affordable housing crisis and homelessness disaster, and is light when it comes to other social determinants of health.
More detailed analysis will follow in the coming days as experts and analysts dig through the 477-page federal budget. Here is a first look and a few overall comments.
First, on housing:
Federal Finance Minister Jim Flaherty’s budget speech is entirely silent on housing and homelessness, even though at least 1.5 million households (more than 4 million women, men and children) are officially classified as being in core housing need, and hundreds of thousands of Canadians experience homelessness annually.
The hundreds of pages of budget documents barely mention housing, except to repeat some previously announced housing spending. There is one brief reference to a youth and housing initiative, but no other details appear in the budget.
Second, on the broader area of social determinants of health ” and social spending:
There are modest increases in some social programs (such as elderly benefits, and health and social transfers).
However, the significant spending increases are in the crime and terror agenda. For instance, there is almost $1 billion in spending over the next two years on the military (up $354 million); federal jails (up $106 million); Canadian Security Intelligence Service (up $80 million); and an additional $200 million for Afghanistan.
Corporations and wealthy individuals have received close to $1.5 billion in tax cuts over the next two years in today’s federal budget. In overall terms, individual Canadians have been picking up a bigger share of federal taxes in recent years, and budget 2007 continues the trend.
Personal taxpayers will pay $3.5 billion more in income taxes in fiscal 2007 for a total of $115 billion, while corporations will only pay $1.3 billion more in fiscal 2007 for a total of $36 billion. In fiscal 2008, corporate income taxes will actually drop by $1 billion while personal income taxes will increase by another $5.6 billion. In recent years, corporate profits have been at record levels, yet the corporate share of the federal tax pie is shrinking.
The federal budget sets as a key goal clarifying roles and limiting the use of federal spending power ” which means, in simple terms, a continued erosion of federal spending in key social policy areas in favour of some increased federal funding to the provinces and territories.
However, there is no guarantee of national standards or accountability, which threatens a further balkanization of social policy across Canada. Federal funding cuts and downloading have been a feature of federal governments for almost two decades (including, notably, the 1995 federal budget which saw the cancellation of the Canada Assistance Program) and today’s federal government accelerates that trend.
One key measure of the ongoing deterioration is the chart of page 305 of budget 2007 which shows that federal spending as a percentage of the gross domestic product remains stalled in the low teens. This means limited dollars for investment in key social priorities (like housing and the other social determinants of health), along with other priorities like climate change (such as public transit).
The bottom line is that budgets are about choices ” and, of course, about spending. Opinion polls consistently show that Canadians want their governments to invest more dollars in social, health, education and environmental priorities, including public transit.
Budget 2007 fails to meet the standard set by Canadians for a government that delivers programs that meet the fundamental values and visions of people across the country.
More details will follow in the coming days
– Michael Shapcott